French Minister Urges German Cooperation In Crisis

Earlier this month, Merkel and French President Nicolas Sarkozy pledged to work closely together to support their car industries.

France and Germany must use the financial crisis to reinforce industrial policy cooperation in key sectors such as automobiles and energy, French European Affairs secretary Bruno Le Maire said on Thursday.

Speaking at a conference on Franco-German relations in Paris, Le Maire said the crisis had made clear the need for more coordination of national economic policies between the euro zone's two biggest economies.

"It seems unthinkable to me that we can't reach an agreement for our industries to reinforce each other so that by the end of the crisis we have big European industries that are stronger, more competitive and which allow us to win market share with the best automobile industry in the world," he said.

"That's the path we should be taking rather than the path of exacerbated rivalry between constructors that in the end benefits no one," he said.

Germany and France, home to Europe's biggest carmakers, have watched in alarm as sales have plunged in the crisis, threatening an industry which accounts for about one job in five in Germany and one in ten in France.

Officials and politicians including German Chancellor Angela Merkel have also expressed suspicion of U.S. government subsidies to the sickly American auto sector, fearing they could disadvantage European employers.

Earlier this month, Merkel and French President Nicolas Sarkozy pledged to work closely together to support their car industries and France said this week that it is willing to pump up to 6 billion euros ($7.79 billion) in to the industry.

However the government has also made clear that it would expect companies to safeguard French jobs in return for the aid.